Apple to Pay $530 Million to Smartflash for Patent Infringement

Apple gets slapped with lawsuits all the time, that's just part of being a massive company. But it's rare that a judge orders the company to pay millions of dollars in fines for patent infringement. A judge in Texas has determined that Apple did infringe on patents held by a company called Smartflash.

The judgement states that Apple used three patents owned by Smartflash in iTunes. Smartflash had originally asked for $852 million in damages, but the judgement was for $530 million, which is still a massive blow to Apple. Apple has told press that the company will appeal the ruling.

Patent Owning

Smartflash doesn't manufacture anything, but the company does hold a number of patents including the payment systems, digital rights, and data storage patents that Apple used. Apple argues that companies like Smartflash that simply own patents should not have the right to do so.

Companies like Smartflash purchase popular patents in order to gain royalties, Apple reps state. Apple further claims that the company did, in fact, create the technology behind the patents even though Smartflash purchased those patents at a later date. Apple is refusing to pay millions of dollars in patent infringements for technology that the company claims it created.

Additional Suits

Smartflash hasn't just gone after Apple. The company has also filed lawsuits against HTC, Google, and Samsung. The Smartflash company is registered in Tyler, Texas, which also happens to be the one place where patent suits are popular. In the past, patent suits that have been brought in front of judges in Tyler have been settled for the plaintiff. If there's a patent battle, the company filing the suit has a better chance of winning in Tyler than anywhere else, it seems.

Apple claims that this lawsuit is unfair, and that the company did, in fact, create the technology behind the patents. Even so, the law states that whoever owns a patent has the right to determine how that patent is used. Since Apple did not make arrangements with Smartflash to use the patents, Apple is legally in the wrong.

An Interesting Case

This particular Apple case brings up an interesting topic. Is it just for a company to purchase and own a number of patents even though that company has not developed any of the technology behind the patents? Can companies like Smartflash purchase a number of patents, and then sue a company like Apple for using some of those patents?

Can Apple really prove that the patents were developed by someone in their company? It will be interesting to see whether or not Apple is able to appeal this ruling, and whether or not Apple can prove where the patents came from originally. This case might even set a precedent for other companies like Smartflash in the future. Apple certainly intends to change the way that patents are bought and kept with this case.

Apple is set to appeal the court decision this month. I'll keep you posted on updates, so make sure to check back.